IKEA has been the world’s largest furniture retailer for nearly 15 years, and its approach to interior design will continue to propel its growth in the future. With this in mind, it’s no wonder why many want to invest in IKEA stock.
The Swedish furniture company is known worldwide for their do-it-yourself furniture, meatballs, and their iconic stores.
If you’re interested in investing in IKEA stock, we’ve gathered all the facts and figures you need to know about the multinational giant, including a list of competitors worth investing in.
Can You Buy IKEA Stock: Is the Company Publicly Traded?
At this moment, IKEA is privately held, and the foundation that holds the company has no plans of an initial public offering.
So, no, you cannot buy or sell IKEA stocks.
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What Would IKEA Stock Price Be?
There is not a stock price associated with IKEA, nor is there any available stock information, as the company is not publicly traded.
The company is owned by a private foundation that has only one goal: preserve the legacy of the IKEA concept.
Because of this, it’s unlikely that IKEA will ever be publicly traded — unless the company falls under new ownership.
However, given the company’s recent revenue and potential for growth, it is reasonable to assume that its stocks would be high in value.
Will We Ever See an IKEA Stock Symbol?
While some companies plan on eventually trading on the stock exchange, IKEA’s owners (INGKA) have absolutely no interest and are avidly opposed to the idea.
So there is no stock symbol for IKEA at present time.
The retail giant does not want any outside influence on business operations and views public investment as antithetical to its goals.
IKEA will likely remain privately held indefinitely, and will never be traded on the stock market.
IKEA Stock: Who Owns IKEA
The business model is quite complex and makes it hard to keep track of exactly who owns the giant corporation.
To put it simply, INGKA Holding is the owner of the IKEA Group, and they are responsible for the IKEA centers, retails, customers, and services related to IKEA products.
The Interogo Foundation owns the Inter IKEA Systems, which are responsible for the design, manufacturing, and supply of IKEA products.
IKEA is essentially split into two divisions; the storefront and all related services (The IKEA Group), and product development and supply (Inter IKEA systems).
Together, the two divisions make up the giant that is IKEA.
IKEA Stock: The Company’s Story
IKEA is well-known for its modernist furniture designs, its affordable household products, and (in the U.S.) its cafeteria and restaurant-quality food options.
Most major cities have a local store that serves them and the surrounding smaller towns.
IKEA continuously researches and innovates, priding itself on efficiency and high service standards.
However, it’s important to understand that IKEA didn’t start out as the giant that it has become.
The company actually arose from humble beginnings.
IKEA Stock: A Brief History of IKEA
Founded in 1943 by Ingvar Kamprad, IKEA started off as a small mail-order business based in Älmhult, Sweden.
The business originally sold small goods, such as pens, wallets, and picture frames — though (as you know) this would eventually change.
Within five years, the success that the small company saw influenced it to move to larger products, and it began carrying furniture.
Due to the difficulty of reaching potential customers, IKEA developed the first IKEA catalog in 1951.
IKEA Store: The Goal of Retail Locations
Ingvar’s goal had become making beautiful furniture affordable to anyone who wanted to buy it.
Shortly after the success of the IKEA catalog, Ingvar opened the first IKEA store in Älmhult in 1958.
The original IKEA showroom was necessary due to the public’s skepticism of IKEA’s low prices.
Many believed that the furniture had to be low-quality due to the pricing listed.
Ingvar responded to this skepticism by showing them in person just how high-quality the furniture was.
After visiting the company’s showrooms, customers were sold on IKEA’s high-quality offerings, and the business began experiencing even more growth.
IKEA Grew Without the Stock Exchange
The success of the first showroom and IKEA store caused the success of IKEA to skyrocket, and within the next ten years, new stores were opening in other Scandinavian countries, like Norway in 1963 and Denmark in 1969.
Every few years, another IKEA store would open in a different region of the world. IKEA opened stores in Canada prior to the U.S.
Eventually, the furniture maker reached 52 countries, with 446 individual locations.
IKEA plans to open in a 53rd country by the end of 2021.
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IKEA Stocks: Innovative Customer Experience
True to form, IKEA stores have innovated further than just a do-it-yourself shopping experience.
All stores also include a restaurant or cafe that sells Swedish prepared food as well as local favorites, like poutine in Canada.
In many cases, the foodservice portions of IKEA stores do quite well, accounting for 5% of the company’s sales.
Another unique experience offered by the IKEA store is the kid’s play area called Småland, which is Swedish for “small lands”.
IKEA Stock: Parents Welcome
The play area provides kids with much-needed playtime that they can’t have if they are following their parents as they shop.
The Småland space in IKEA is staffed and children are attended until the parents have finished shopping.
The company has also continued with the catalog model that it created decades ago but has changed it slightly.
IKEA moved towards creating a more customer-oriented experience and created the IKEA family card as well as designed a quarterly magazine for the members of the IKEA family.
The magazine centers around home design and home life and is targeted towards customers looking to redesign or renovate their homes.
The card also allows customers to save money on each transaction made in the store.
IKEA Stock: Criticism in the U.S.
Despite the company’s entire warehouse being loaded with high-quality home furnishings, home furniture as well as office furniture, IKEA suffers from criticism in the United States.
Though there are people who swear by it, IKEA is typically not as well-received as its competitors.
IKEA Stock: Why Is IKEA Valuable?
IKEA has made itself one of the most valuable furniture companies in the entire industry due to its dedication to innovation and design.
Through consistent research and development, IKEA can lower the cost of products by an average of two to three percent each year, making them a very attractive option for anyone searching for new furniture.
In addition to this, IKEA has made themselves valuable through the use of their website.
The privately held company’s approach that includes a physical and e-commerce solution to furniture shopping has resonated with many customers across the world.
IKEA Stock: Finding Success Overseas
While IKEA’s website does not perform very well in the U.S., on a global scale, it is very successful.
Additionally, the website houses and provides delivery for products that are not available in all stores.
The site also catalogs nearly 12,000 unique products. In one year, IKEA’s website sees over 2 billion users on average.
IKEA Stock: Competitor Stocks You Can Buy
IKEA has many successful competitors who are publicly traded.
While some of their competitors are not quite as popular as the industry giant, they could be a solid addition to any portfolio.
Wayfair Inc. (NYSE: W)
Wayfair is an American furniture company and a direct competitor of IKEA.
Wayfair is one of the most popular e-commerce websites in the U.S., having nearly 80 million visitors to the website in 2020.
Out of those 80 website million visitors, it’s estimated that nearly 30 million were active customers. This is a solid conversion ratio that any company would be lucky to achieve.
IKEA Stock: Wayfair’s Earnings Stabilized
For some time, Wayfair was experiencing losses rather than gains, and the company’s future was unsure.
However, throughout 2020, the company saw massive increases in growth, with figures topping what they had in years prior.
It is entirely possible that these figures grew at such an astonishing rate due to the pandemic, as people became more interested in delivery than in-store purchases.
The current stock price for Wayfair is $249 per share.
TJX Companies Inc. (NYSE: TJX)
If you want a competitor that is more comparable to IKEA, your search is over. In the United States, TJX Companies is one of IKEA’s largest direct competitors.
The TJX Companies umbrella covers three major home furnishings stores in the country: HomeGoods, Homesense, and Sierra.
In addition to these names, other retailers that fall under the umbrella, like Marshalls and TJ Maxx, sell household goods that are available in IKEA, as well.
The one thing that all TJX Companies brands have in common is their business model.
They take name-brand products and offer large discounts on them, making them affordable to the everyday consumer.
Overall, TJX Companies is made up of over 4,500 storefronts in nine different countries.
They aren’t quite the megalith that IKEA is, but their company still shares an impressive part of the market with how diversified they are.
The current stock price for TJX Companies is $68 per share.
Amazon.com Inc. (NASDAQ: AMZN)
In today’s market, Amazon is nearly every company’s competitor — no matter the niche.
Amazon’s advantage over most companies is the fact that it doesn’t have a physical storefront and makes sales exclusively through its e-commerce website.
However, when competing with IKEA, this strength is in fact a weakness.
IKEA’s place in the world can be attributed specifically to the IKEA store itself.
As a brand, Amazon can take nearly any product on the market, furniture included, and create it at a cost that’s a fraction of their competitors, then sell it for far less, as well.
The portion of IKEA’s business model that would actually benefit Amazon is a storefront showcasing the quality of the products being sold.
When ordering from the Amazon website, one of the top questions for any unrated product is whether its quality is reasonably high enough for purchase.
Even if a product is on sale, Amazon’s hit-or-miss quality control can make a buyer hesitant.
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IKEA Stock: What Is IKEA Worth?
While IKEA has massive revenue from year to year, the value of the company actually peaked years ago and has fallen since.
In terms of revenue, the company reported $48 billion of annual revenue in 2020, even amidst the pandemic.
The loss was able to be tracked, with 2019’s figures showing annual revenue of over $50 billion.
That being said, the company’s annual revenue in 2010 was just shy of $29 billion, showing massive leaps in revenue generation in just a decade.
IKEA Stock: Inconsistent Earnings as of Late
In terms of net income, the company seemingly peaked in 2016 with a net income of just over $5 billion.
Since then, net income has dropped sharply, with 2020’s annual net income at $1.44 billion.
If IKEA were publicly traded, the company would have to speak to such an enormous loss.
However, since IKEA is not available on any stock exchange, the company can continue to do business as it sees fit.
IKEA Stock: Final Thoughts?
IKEA is an international company that has fostered strong brand loyalty through a dedication to creating high-quality products at a low price.
The company spends its time conducting research and development on nearly all of its products, both new and seasoned.
This ensures that IKEA can offer the lowest prices possible to their customers while still providing the excellent services they’re known for.
This ability to provide a good product at an affordable price has led them to the success that they are known for today.
The company is not currently offered publicly on the stock market, and there is no date set for an IPO.
IKEA Stock: Key Takeaways
Because IKEA is owned by two companies who have been tasked with keeping the values of IKEA intact, it is highly unlikely that the company will go public.
That being said, there are a handful of competitors, like Wayfair and TJX, that have stocks available for trading, and that have been seeing renewed success in recent years.
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